International. Evonik explained that it aims to harness additional growth potential through innovation. "New products, solutions and business models will make a significant contribution to Evonik's growth and profitability.
"These are essential parts of its strategic agenda," said Harald Schwager, VP of the Executive Board of Evonik Industries and responsible for innovations. "Evonik's innovation channel is very well supplied and its value has increased by a third in the last five years."
Schwager intends to quickly implement these business plans to generate additional sales from the value of the project channel. "We need to bring our innovation projects to customers faster and even more focused. We will achieve this by increasing our efficiency in research and development, working closely with customers," he added. In the medium term, Evonik's goal is to increase to 16% the share of products and applications developed in the last five years in the company's sales. Currently, this share is 10%.
Evonik aims to increasingly support customer success through digital technologies. Recently, the company announced that it would make available about 100 million euros for digitization projects. "Our priority is new business models, as well as customized solutions and services for customers. Digital change will be an essential driver of innovation throughout our customers' supply chain and industries," Schwager emphasized.
Research and development expenditure remains high at more than €400 million per year. Schwager, however, believes the research is not an end in itself. "It needs to happen in a way that focuses on projects that promise more business and growth—in the short, medium and long term." Consequently, close to 90% of the funds are invested in the research efforts of the operating segments, and specifically in businesses with particularly high growth potential. The share of R&D spending in revenue (P&D ratio) in those businesses is already 4-6%. In the Group as a whole, the R&D ratio exceeds 3%.
"We see innovation as crucial to securing and expanding our market positions. In addition, we are working on areas that will generate new business for us, driven by innovation. Evonik especially prioritizes six areas of growth in innovation: Sustainable Nutrition, Health Solutions, Advanced Food Ingredients, Cosmetic Membrane Solutions and Additive Manufacturing. Each of them is supported by a clear strategy with business goals, market objectives and business models, including the acquisition of skills. "Innovations in these areas will generate an additional billion euros in sales by 2025," explains Küsthardt.
